Analysis of 3D seismic data by Lunnon Metals Ltd (ASX:LM8, OTC:LNMLF) has identified a possible new channel feature with nickel potential at the Long South Gap target in Western Australia.
This prospect sits within the Silver Lake-Fisher project in the heart of the famous Kambalda nickel district in the state's Eastern Goldfields.
While gold remains the focus of the company’s short-term drilling strategy at Foster-Baker, Long South Gap represents a significantly underexplored 5.8-square-kilometre area immediately adjacent to Lunnon’s historical Silver Lake mine to the west and the highly endowed Kambalda Dome.
Analysis of data
Lunnon prioritised analysis of seismic data collected in late 2023 from the western and northern areas of the Long South Gap, referred to as the ‘Cube’, which is immediately adjacent to Wyloo Pty Ltd’s Long Operation.
The key geological features assessed were the basal Lunnon Basalt-ultramafic contact — the traditional and main prospective nickel sulphide contact — and any faults that could potentially disrupt or displace that surface.
This analysis has identified a previously unrecognised and potentially nickeliferous channel feature which is 1-kilometre-long and between 100 metres and 150 metres wide and is almost exactly halfway between the McLeay channel, at Wyloo’s Long Operation, and the Silver Lake channels on Lunnon’s tenure.
Lunnon Metals managing director Edmund Ainscough said: "It has been a mammoth exercise to process, analyse and then interpret the wealth of data that the 3D seismic survey generated in 2023.
“To achieve the best possible outcome in the shortest time, it made sense to prioritise the area closest to Wyloo’s highly endowed Long Operation at the northern end of the ‘Cube’ and it is exciting to report the identification of a new, previously unrecognised channel.
Looking ahead
These outcomes represent an exciting development in the discovery effort at Long South Gap and Lunnon asserts that it remains confident in the potential for a significant discovery in this area, describing the results of this latest analysis of the 3D seismic data as another step forward in defining what appears to be an “exciting target at depth”.
However, given the poor nickel market sentiment since it began this program in 2023, the company has paused new surface nickel exploration activities.
This decision was made to preserve cash and enable Lunnon to progress low-cost, near-surface exploration for high-grade gold opportunities, confident knowing that all necessary nickel surface drilling at its cornerstone nickel assets, the Baker deposit and Foster mine, is complete.
Strong cash balance
Ainscough said, “The nickel sector is a very different place now compared to when we started this program in 2023. The cost-cutting exercises we have implemented, coupled with not needing to complete any further surface nickel drilling at Foster and Baker, sees our cash balance remaining strong.
“In the fullness of time, when conditions improve, we can quickly pivot to unlocking the potential of the Long South Gap, remembering that the prospective komatiite-basalt contact has never been tested in this large area immediately adjacent to over 460,000t of past nickel metal production”.
And while Lunnon has reached in-principle agreement with Wyloo to access waste rock from the Long Operation stockpiles to construct a drill causeway on the surface of Lake Lefroy to facilitate more cost-effective deep diamond drilling, it has postponed that causeway program for the foreseeable future.
When sentiment improves Lunnon can commence these activities as it has already received disturbance approval from the regulator.
In the meantime, the company intends to investigate low-cost initiatives to extract as much information as possible from the 3D seismic Cube. This may include using machine learning techniques to refine existing targets and hopefully define new ones.
Plan view of the Silver Lake-Long South Gap area illustrating geological solid interpretation of the prospective nickel contact (yellow), original 2D seismic lines, the 3-kilometre-long Silver Lake (Lunnon) mine and possible new channel (red call-out) interpreted from the ‘Cube’.
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